Somalia - Mogadishu Water Supply Project

Document of The World Bank FOR OFFICIAL USE ONLY j J CO?N Report No. 1860-SO SOMALIA MOGADISHU WATER SUPPLY PROJECT STAFF APPRAISAL REPORT May 12, 1978 This document has a restricted distribution and may be used by recipients only in the performanc2 of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  SOMALIA MOGADISIIU WATER SUPPLY PROJECT CURRENCY EQUIVALENTS 1 USS Somali Shilling (So. Sh.) 6.295 1 Somali Shilling = US$0.1589 WEIGHTS, LENGTHS AND MEASURES mm = millimeter (0.03937 inches) cm - centimeter (0.3937 inches) m - meter (39.37 inches) km2 ' kilometer (0.62 miles) ki - square kilometer (0.386 square mile or 247 acres) m ' cubic meter (220 Imperial gallons or 264.2 US gallons) I - liter (0.220 Imperial gallons or 0.264 US gallons) l/sec - liters per second (19,005 Imperial gallons per day or 3 22,824 US gallons per day) m /sec = cubic meters per second (19.0 million Imperial gallons per day or 22.8 million US gallons per day) lpcd = liters per capita per day ABBREVIATIONS AND ACRONYMS AfDF = African Development Fund GIBB - Sir Alexander Gibb and Partners MWA m Mogadishu Water Agency MMWR = Ministry of Minerals and Water Resources PPF - Project Preparation Facility UK - United Kingdom USAID = United States Agency for International Development WDA - Water Development Agency WHO = World Health Organization WRDC - Water Resource Development Committee FISCAL YEAR January 1 - December 31 This report was prepared by Messrs. E. LaBahn, E. Greenwood and H.W. Barker, and is based upon information obtained during a mission to Somalia in September 1977.,  FOR OFFICIAL USE ONLY SOMALIA MOGADISHU WATER SUPPLY PROJECT TABLE OF CONTENTS Page No. I. THE WATER SUPPLY AND SANITATION SECTOR .................... 1 Background ........................................... 1 Water Resources ...................................... 1 Population .......... 1 Population Served .................................... 1 Public Health ........................................ 2 Organization ......................................... 2 Sector Objectives .................................... 4 Sector Development ................................... 4 Sector Investment .................................... 4 Water Rate Policy .................................... 5 II. THE BORROWER AND THE PROJECT IMPLEMENTING AGENCIES .... .... 6 Introduction ......................................... 6 Mogadishu Water Agency .......................... 6 Formation ............................................ 6 Responsibility ....................................... 6 Staffing and Recruitment ............................. 6 Accounting Practices and Procedures .................. 7 Billings and Collections ............................. 8 Auditing ............................................. 8 Scope of MWA Activity ................................ 9 Water Development Agency ........................ 9 Manpower Development and Training .... ........... 10 III. DEMAND AND MARKET ASPECTS ................................. 12 Background ................... 12 Existing Facilities and Service ...... ................ 12 Historical Water Demands ......... .................... 13 Composition of Demand ............ .................... 13 Factors Affecting Future Demand ...... ................ 14 Population Forecast ................................... 14 Variation in Demand ................................... 15 Interim Improvements by MWA ........ .................. 15 Production Capacity Provided by Project ..... ......... 16 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii - Page No. IV. THE PROJECT . ................................................ 20 Scope of Project ..................................... 20 Project Description .................................. 20 Cost Estimates ....................................... 21 Financing of Project ................................. 22 Project Implementation ............................... 22 Advance Contracting and Retroactive Finance .... ...... 23 Procurement .......... ................................ 23 Disbursement ......................................... 24 Closing Date ......................................... 24 Counterpart Advisors ................................. 25 Project Management and Planning Unit ................. 25 Training ............ ................................. 25 Management Specialists ............................... 25 Tariff Studies .................................. 25 Environmental Impact ................................. 25 Monitoring Criteria ................................. 26 V. FINANCIAL ANALYSIS .................................. 30 Past History and Present Financial Position .... ...... 30 Tariffs ........... ................................... 30 Proposed Financing ................................... 31 Fulture Performance ................................... 33 lI. PROJECT JUSTIFICATION ..................................... 40 Satisfaction of Demand ............................... 40 Benefits to Urban Poor ............................... 41 More Reliable Water Service .......................... 41 Least-Cost Alternative ............................... 42 Strengthening of Water Supply Sector .... ............. 42 Return on Investment ................................. 42 Sensitivity Analysis ................................. 42 Average Incremental Costs ............................ 43 Non-quantifiable Benefits ............................. 43 Risks . ............................................... 43 VII. AGREEMENTS REACHED AND RECOMMENDATIONS .................... 46  - iii - - ANNEX 2.1 Organization Chart of Mogadishu Water Agency 3.1 MWA Demand Forecast 3.2 Demand vs. Production Capacity 3.3 MWA Water Demands and Production Capacity 4.1 Project Cost Estimates 4.2 Project Implementation Schedule 4.3 Monitoring Indicators 5.1 Cash Flow Projections 5.2 Income Statement Projections 5.3 Balance Sheet Projections 5.4 Notes to Financial Statements 6.1 Incremental Costs and Return on Investment 7.1 Selected Documents and Data Available in Project File MAPS Mogadishu Water Supply Project   SOMALIA MOGADISHU WATER SUPPLY PROJECT I. THE WATER SUPPLY AND SANITATION SECTOR Background 2 1.01 Somalia, with a land area of 637,700 km , is situated in the most easterly corner of the African continent, bordered on the north by the Gulf of Aden and the Arabian Peninsula, on the east by the Indian Ocean, and on the west and southwest by Ethiopia and Kenya. Although the northern and parts of the eastern area are mountainous, most of the country consists of plateau sloping easterly from the Ethiopian Highland to the Indian Ocean with a broad coastal plain to the south. 1.02 The climate is arid in the north and central portions to semi-arid in the south in the inter-riverine area, with rainfall ranging from 50 mm to 600 mm annually. Annual precipitation is irregular and risk of drought ever-present. The principal rainfall season is from April to June with a minor season occurring from October to December. About 80% of the popula- tion depend upon agriculture and animal husbandry and more than half of Somalia's land is suitable for livestock production. Water Resources 1.03 Water resources in Somalia are unevenly distributed and scanty. There are only two perennial rivers, the Giuba and the Shebelli, which origi- nate outside Somalia and traverse the southern part of the country. Although generally limited both as to quantity and quality, ground water is Somalia's principal source of water supply. In the Giuba and Shebelli river basins, ground water can be used in conjunction with surface water supplies. Good records of surface water exist although records of ground water resources are deficient. Population 1.04 The population of Somalia was estimated at 3.3 million in 1975 and to be increasing at a rate of 2.4% per year. Urban population was estimated at 1.0 million and has been growing at about 4.4% annually, whereas the rural population has been growing at a rate of about 1.3% per year. Mogadishu, with an estimated 445,000 inhabitants, or 40% of the urban population, is the country's capital and largest city and is growing at about 6% per year whereas the balance of the urban area has an annual growth estimated at about 3.6% per year. Population Served 1.05 Based on information collected during a water supply and sewerage sector study made in 1976 under the WHO/IBRD Cooperative Program, 20% of the  - 2- rural population and about 60% of the urban population had reasonable access to water supply service in 1975. The percentage of Somalia's urban population provided with water service is significantly affected by the relatively large proportion (about 87% in 1975) of Mogadishu's population served from the public water supply. 1.06 Public sewerage exists only in Mogadishu where service is restricted to hotels, offices and a relatively small residental population (about 3000) located in the central portion of the City. The system is old and a project to extend this system and also provide storm water drainage recently was ap- praised by the African Development Fund (AfDF). The remaining urban popula- tion is served by individual disposal systems. Public Health 1.07 There are few reliable statistics on specific water-borne and sani- tation-associated diseases although morbidity and mortality due to common enteric and parasitic diseases are known to be exceptionally high through- out the country. Tuberculosis, malaria, various diarrheas, dysenteries and parasitic infections directly attributable to environmental deficiencies, are the more commonly observed of the important communicable diseases. Among infants and children, gastroenteritis is the most common communicable disease, a recent study revealing that 40% of the children examined were suffering from the disease. Rural areas, small urban centers and fringe areas of the largest cities are particularly subject to these diseases due to the lack of communication, convenient medical facilities and basic sanitary measures of safe water and sanitation. Organization 1.08 Although several different agencies are involved, no agency is in charge of overall planning and programming of community water supplies and waste disposal in the country. At the central Government level, three organizations, viz., the Ministry of Minerals and Water Resources (MMWR), the Ministry of Health (MOH), and the Water Resources Development Committee (WRDC) mainly are involved in the sector. A recently formed Ministry of Municipal Affairs and Rural Development may also become indirectly active in the sector although presently there is no information indicating the extent of these future activities. Local government agencies are responsible for both water supply and sanitation but, except for a rudimentary wastewater system in Mogadishu (see para. 1.06), currently only water supply is provided. Autono- mous water agencies exist in three major cities, viz., Mogadishu, Hargeisa and Chisimaio. 1.09 Responsibilities of MMWR are carried out by the Water Development Agency (WDA) and the Mogadishu Water Agency (see paras. 2.02 and 2.18), which are the principal organizations in the sector. WDA provides technical  - 3 - assistance to both rural and urban communities through seven regional offices and a headquarters office located in Mogadishu. Although WDA has many re- sponsibilities, due to staff constraints, it is effective in only a few. Its activities have been confined largely to the construction of tube wells for domestic and livestock use, provision of public standposts and impoundments for small urban communities and rural villages, and watering points for the nomadic population. It also constructs tube wells under contract to private and quasi-governmental organizations. Due mainly to the lack of qualified engineering personnel, WDA does not design or construct piped water supply systems. The little work of this type so far attempted has been contracted to foreign consultants financed through bilateral assistance. A program of this type financed by the Federal Republic of Germany recently was begun for ten small towns throughout the country. 1.10 WDA is headed by a General Manager appointed by the President on the recommendation of the Minister of Minerals and Water Resources. Four major departments exist, viz., Drilling, Engineering, Administration and Hydrogeology, although many authorized posts are vacant. 1/ WDA is partially funded through Government budgets and partially through revenue-producing activities. It is empowered to recover project costs from municipalities, may borrow funds for its operations from Government and from external sources with prior approval of MMWR, and may contract its services to cooperatives or clients outside of Government channels. 1.11 MOH's responsibility in the sector has been limited mainly to exer- cising control and surveillance over water quality and guiding local communi- ties in environmental sanitation. Through the basic Health Service projects, MOH is attempting to improve water supply and sanitation in rural areas. These pilot projects have been effective although, due to limited finance and constraints in material and human resources, effectiveness of MOH in other areas has been minimal. 1.12 WRDC is a national advisory group consisting of representatives of the ministries of Interior, Mineral and Water Resources, Livestock and Director General of Planning and Coordination. The Committee is instrumental in helping to shape sector policies and functions as a coordinating body with respect to all water resource projects. It advises the sector agencies, principally WDA and local governments, in the selection of projects and in budget preparation. 1.13 Other Ministries also are active in the sector. The Ministry of Agriculture implements projects which involve the construction of tube wells and dug wells, the Ministry of Livestock provides watering points in rural 1/ In 1976 approximately half of the established posts were vacant with none of the posts in the Hydrogeological Department and only 40% of the posts in the Engineering Department being filled. A particular deficiency exists in the Drilling Department due to the shortage of experienced drilling superintendents.  - 4 - areas for nomads, and the Ministry of Defense constructs wells for military reservations. None of these organizations has the capability of independently planning and implementing water supply projects and must depend upon WDA, ex- patriate advisors, or consultants for such expertise, generally on a project by project basis. The various agencies operate more or less in isolation thus fragmenting sector development efforts. Sector Objectives 1.14 Government's development objectives for the sector are expressed in general terms, and are not supported by plans for attaining those objec- tives. Government's objectives are to provide: (i) adequate, reliable and saEe water for domestic use and water for livestock, industry and agriculture at modest prices throughout the country; and (ii) future water facilities within reasonable access of all potential users. Sector Development 1.15 Little sector development has occurred to date. In the early 1970s external assistance from the United States Agency for International Develop- ment (USAID) provided technical assistance and finance for water system extensions in the cities of Chisimaio and Mogadishu. Additional aid was provided in the mid-1970s by the People's Republic of China through finance of extensions to the Hargeisa water system. Other more recent assistance was provided to WDA and has consisted of the furnishing of expatriate advisors by the United Nations Development Programme and the financing of specialty equjipment by the Union of Soviet Socialist Republics. The latter assistance recently was terminated. 1.1L6 Ongoinig external assistance also is being provided to WDA by the Federal Republic of Germany (Germany). The assistance consists of a 5 DM miLlion (US$2.5 million) technical assistance grant and a 22.9 DM million (US$11.5 million) capital assistance loan for the construction of water sys- tems in ten townls (see para. 1.09). The German Government is also consider- ing additional technical assistance to strengthen WDA through training and provision of expatriate advisors. Sector Investment 1.17 The Five Year Development Program (FYDP) for 1974-78 allocated So Sh. 139 million (US$22 million) for water supply out of a total planned public investment program of So.Sh. 3,863 million (US$614 million). Due maiinly to the drought, but also affected by the international economic crisis and the poor state of project preparation, neither total invest- ment nor investment in the water supply sector achieved planned expenditure levels. Actual total investment during the period 1974-76 in all sectors reached 52% of the planned investment program while actual investment in the water supply sector for the same period reached only 45% of the pro- grammed amount. Only two agencies were involved in implementing water supply  5- improvements included in the 1974-78 FYDP. These were MWA for Mogadishu and WDA for the remaining urban projects, the rural projects, and for procurement of equipment and for carrying out related research. The 1976 water supply and sewerage sector study recommended that the balance of the 1974-78 Devel- opment Program be reformulated in the light of recent developments and sug- gests a revised sector investment program for the period 1976-83. The total required investment 1/ approximates So.Sh. 534 million (US$84.8 million) with most of this investment scheduled for the four years 1978-82. Based upon past experience, this proposed level of investment is unlikely to be achieved due to Government's limited absorptive capacity. 1.18 Despite the relatively large proportion of population currently provided water service in Mogadishu (see para. 1.05), Government places a high priority in the early expansion of the Mogadishu water system because of Mogadishu's high rates of growth of population and water demand, its importance as Somalia's center of government, and the current extent of the City's water supply deficiencies. Proposed Bank Group participation is intended primarily to assist with long-term institutional improvements within the sector. 1.19 Initially, it was assumed that Mogadishu's existing well field could be expanded to develop whatever additional supply capacity was required. How- ever, in 1977 it became apparent that production from MWA's existing well field could not be significantly increased and future increases in demand instead must be met from as yet unidentified sources of supply. Comprehensive water resource investigations are needed to identify suitable sources. Assuming these investigations could begin shortly, a project including long-term water supply improvements could not be appraised before 1979. Since Mogadishu faces serious water shortages which cannot be relieved until a major addition in supply capacity is completed, it was decided to split the project into two separate projects. The first of these, the proposed Project (Phase I), is a small-scale project to carry out water resource investigations and to increase production from the existing well field. The subsequent water supply project, designated Phase II, would provide a long-term solution through provision for additional supply capacity located elsewhere. In order to speed up the time of preparation of the Phase II project, the Bank's Project Preparation Facil- ity (PPF) is being used to finance a portion of the water resource investiga- tions. Water Rate Policy 1.20 No national water tariff policy exists. Tariffs are levied only in urban areas where water rates vary by community. 1/ As modified by Bank staff to reflect recent planning for Mogadishu.  - 6 - II. THE BORROWER AND THE PROJECT IMPLEMENTING AGENCIES Introduction 2.01 The Borrower would be the Government of the Somalia Democratic Republic (SDR) which would relend the major portion (about 99%) of the US$6 million IDA Credit to the Mogadishu Water Agency (MWA), on the terms stated in para. 5.08. The remaining portion of the credit consisting of technical assistance would benefit the water supply sector through the Water Develop- ment Agency. Mogadishu Water Agency Formation 2.02 MWA was established in 1967 to provide public water supplies in Mogadishu shortly before the signing of a loan agreement between MWA, Govern- m(ent and USAID. In April 1970, together with Chisimaio Water and Electric Utility, it was merged into the National Water Agency (NWA). In 1971, NWA was replaced by the Water Development Agency (WDA) and MWA was reestablished and became responsible for the operation of Mogadishu's water supply system. In 1974, the Council of Ministers and the Supreme Revolutionary Council officially approved the creation of MWA. Recently MWA was made an auton- omous agency under the Ministry of Mineral and Water Resources (MMWR). Responsibility 2.03 Previously MWA's General Manager reported to the Mayor of Mogadishu but was given considerable freedom to conduct MWA's affairs, consulting the Maiyor mainly on issues of a possible political nature. The General Manager is expected to continue to enjoy similar freedom of action under the new arrange- ments. MWA's annual budgets are approved by the Ministry of Finance and will now be subject to the prior approval of MMWR. Up to now there has been no effective monitoring of MWA's budgets against performance, but major capital expenditure projects are approved by the State Planning Commission. Staffing and Recruitment 2.04 Appointments to the position of General Manager and other senior positions will be made by the President following the recommendations of the Minister of. Minerals and Water Resources. Prior to this, MWA's General Manager will submit his recommendations for senior appointments to the Miinister. Other appointments are made though the Ministry of Labor and appointments are made on the recommendations of an examining committee on which MWA is represented. Salaries and wages are determined by the Govern- ment scale of salaries for public agencies and are generally in line with Government salaries.  - 7 - 2.05 MWA's General Manager, who is experienced in public administration, was appointed in late 1976 and, with adequate technical support, appears to be capable of managing the undertaking. However, operational and accounting staff are weak and need to be strengthened through the appointment of advisors and through staff training which is to form an important part of the Project. 2.06 MWA is presently divided into two departments, one headed by a Director of Technical Operations responsible for the operation and maintenance of the water supply facilities, and a Director of Finance and Administration responsible for accounting, purchasing and personnel. MWA will also create a Project Management and Planning Unit (para. 2.09). MWA's organizational structure, including the planned change, is shown in Annex 2.1. 2.07 In the past, MWA has been troubled by high staff turnover. Some staff have been attracted by higher paid jobs in nearby Middle Eastern Coun- tries, but Government is attempting to reduce this flow through emigration controls. It seems unlikely that employee compensation could be increased to a level competitive with Middle Eastern Countries, although Government is reviewing the adequacy of present salary scales. 2.08 Both the present Director of Technical Operations and the Director of Finance and Administration need support in order to carry out their duties effectively. Therefore, to advise and assist the two Directors, MWA will appoint a Technical Operations Advisor and a Financial Advisor having ex- perience, qualifications, duties and responsibilities acceptable to the Association. The two advisory positions will be retained until Government and the Association have agreed that they are no longer required. Appoint- ments to the two positions will be conditions of Credit Effectiveness. 2.09 MWA is to establish a Project Management and Planning Unit (PMPU), the head of which would report to the General Manager. It is expected that the functions of this unit will be progressively extended to cover planning, design and construction of capital projects. In carrying out these functions, the Unit will monitor and report upon the progress of the Project and handle payment certificates and Credit withdrawals. MWA is to appoint a qualified, experienced and competent person as the head of the PMPU and the appointment of such a person will be a condition of Credit effectiveness. 2.10 To help ensure the continuation of MWA's management capability during Project implementation, future appointments to the positions of General Manager, Director of Technical Operations, Director of Finance and Administration, and head of the PMPU will only be made after the Association has been given a rea- sonable opportunity to comment on the qualifications, experience and competence of the persons proposed to fill such positions. Accounting Practices and Procedures 2.11 MWA's accounting is on a cash basis. Capital and operating expen- ditures are included in the same expense classifications. Fixed asset and depreciation records are not maintained. Physical inventories are periodi- cally checked as to quantity with bin cards by an internal auditor, but there is no reconciliation with financial records. Procurement planning has been  - 8 - weak leading to items having to be ordered at high cost to meet urgent needs. Accciunts receivable records, although cumbersome, are well maintained but lack the additional controls which would be provided through a double entry system. 2.12 As part of the USAID project commissioned in 1973, an accounting system was designed for MWA by Middle West Service Company, a U.S. consulting firm. The consultants found it necessary to assume responsibility for the maintenance of the records and, after their departure, MWA's key staff also left. Subsequently, financial reporting and budgeting has been maintained on a cash basis f'ollowing local government practice in Mogadishu. Due to circumstances beyond their control, USAID were unable to monitor the prog- ress' of the accounting system. There appear to be only limited controls over expenditures as actual performance is not monitored against budgeted perf'ormance. Because of inadequate information for financial planning, MWA is Unable to make! effective judgments as to what extent capital spending should be financed from its internal resources or from loans. MWA has a number of accounting machines financed by USAID but these are not used and their precise capability is not known by MWA. 2.13 It is necessary to establish accounting practices along commercial lines so as to provide adequate information on revenues, capital and operat- ing expenditures and inventory levels; and also to provide information for cash forecasting and planning and controlling capital and operating expendi- ture levels. To help achieve this, accounting specialists whose qualifica- tions, experience and terms and conditions of employment are acceptable to the Association, would be employed by January 31, 1979. The accounting specialists would design and assist in the implementation of a commercial accounting system and would be responsible for identifying any further staff- ing needs. FurthLermore, the specialists would be responsible for arranging or conducting trasining for existing staff. Billings and Collections 2.14 All water consumption is metered. Meters are read monthly and 25 meter readers are employed at seven district offices. Bills are prepared at the Head Office for Government, embassy and fountain sales and at district offices for private consumer sales. All bills are checked at the Head Office and deliveries are made by hand. Disconnections are made if bills are unpaid withLin about two months of the billing date. Outstanding accounts at the end of 1976 were equal to about 35 days annual sales which are indicative of good collection performance. District offices collect accounts billed by them and remit collections daily to the Head Office. Auditing 2.15 There are no private auditing firms operating in Somalia. The audits of Government departments and enterprises are conducted by the Magis- trate of Accounts who is responsible to the President. Government agencies condLucting commercial activities are audited under the supervision of the Agencies Branch of the Magistrate of Accounts office.  - 9 - 2.16 The Magistrate of Accounts audit performance on the Bank Group financed port project in Somalia has been generally satisfactory. The scope of the audit and report on MWA's accounts would be in accordance with generally accepted auditing standards and it is expected that the audit per- formance would be satisfactory. To ensure that future audits continue to be of a satisfactory standard, MWA will have its accounts audited annually by auditors acceptable to the Association. MWA's audited accounts would be submitted to the Bank within six months of the end of the fiscal year. Scope of MWA Activity 2.17 MWA's present activities are confined to water supply. However, a Mogadishu sewerage and drainage project was recently prepared by consultants and has been appraised by the African Development Fund (AfDF). Government is seeking co-financing to help meet the project costs. The Ministry of Public Works will be responsible for project construction. Although Govern- ment has decided in principle to make MWA responsible for operating the sewer- age and drainage facilities, no plans have yet been made for doing so. Before carrying out any plans for extending MWA's activities into the provision of services other than water supply, Government will inform the Association of its proposed managerial, staffing and financing plans and afford the Associa- tion a reasonable opportunity to comment thereon. Water Development Agency 2.18 WDA would be a minor beneficiary of the Project receiving about US$50,000 (less than 1%) of the US$6 million Credit. WDA is a Government agency charged with the responsibility of providing numerous technical services to the sector. One of its principal activities is tube well con- struction, part of the cost of which is funded through Government budget appropriations and part through charges to Government and private enter- prises. However, WDA's effectiveness has been limited mainly due to short- ages of experienced drilling superintendents and hydrogeologists, and to shortages of equipment and supplies (see paras. 1.09 and 1.10). 2.19 Although Government recognizes the need to improve WDA's performance, it requested that all well construction in the Project be carried out by WDA. WDA has been evaluated by the consultants, who indicated WDA would be capable of constructing the wells provided it was strengthened through the addition of expatriate drilling superintendents and hydrogeologists and the provision of some items of equipment. This evaluation is acceptable. Accordingly, with a view to expediting implementation, and with the agreement of the Association, WDA has been employed to undertake the water resource investigations partly financed through the Project Preparation Facility, subject to price safeguards satisfactory to the Association. As noted in para. 4.08, remaining well drill- ing contracts included in the Project would be awarded on the basis of inter- national competitive bidding in which WDA would be permitted to participate.  - 10 - Manpower Development and Training 2.20 Due to the importance placed by Government on the urgent need to develop the entire water supply sector, and given the weakness of the exist- ing organizations and the current scarcity of training resources, the pro- posed Project would include a US$770,000 training component which would be implemented in two stages. 2.21 The first stage would be to make an overall assessment of sector training needs as a basis for determining the scope, cost and expected bene- fits of a water supply sector training program. As there is no agency in Somalia capable of undertaking this work, consultants will be employed, not later than January 31, 1979, on terms and conditions acceptable to the Association to assess the training needs of all sector agencies and to prepare a detailed schedule and description of a training plan for MWA and the con- sultants' recommendations will be furnished to the Association not later than July 31, 1979. It is anticipated that implementation of the elements of the program relating to sector agencies other than MWA would be included in sub- sequent external assistance projects. 2.22 The second stage of the proposed training component would be the implementation of a training program designed to strengthen the operational and accounting functions of MWA. The principal objectives would be to: (a) strengthen and upgrade the present operational and maintenance performance of MWA; to help to develop an effective commercial accounting system and prepare MWA, in all departments, for the implementation of the Project and, subsequently, the Phase II project; and (b) enable MWA to develop a permanent training capability with appropriate resources and local expertise which would, in turn, be available to assist other urban water supply agencies, particularly in training for water distribution and pumping operations. 2.23 Government and MWA have agreed that MWA, with the assistance of consultants employecd on terms and conditions acceptable to the Association, will promptly carry out the training program agreed with the Association.  SOMALIA MOGADISHU WATER SUPPLY PROJECT ORGANIZATION CHART OF MOGADISHU WATER AGENCY Mayor of Mogadishu Mogadishu Water Agency General Manager C Internal Audit Unit Personne tGeneral Mai n c Director of Finance & r ProMect Management I Director of Administration gR and Planning Unit BoseTechnical OperaMions Chief Billing Section | Purchasing -arehouse &PGers fied Stnati Maintenance Worksho n Construction r_ so tend oreanaormanannFoemaaCeware Acountant Superintenden Supervi r Manager ces Supertendent Superint ent and Installa ClerT _l C _esamersi (PrivatedCon- so,eticulation| |PowerPlant| Booster ( Metir | n Engineerin City Well Pn o remanr Foreman Foreman Billing Supti-f ,tr c Foreman_ | Foutais | |B lingSuperi | Suervisors _ g r ] lal Consumes |(rivate Cn ation (21 G 'onetin um er-Foea Fomn ORGANIZATION STRUCTURE. - Eisting Units Chlorinator Surveyors ........ .Proposed Additional Units nicians World Bank - 181 19  - 12 - III. DEMAND AND MARKET ANALYSIS Background 3.01 Meaningful records of water consumption and production are limited to thes period since 1973 when MWA's existing water system was commissioned. Prior to 1973, service was provided to the majority of the population from privately-owned we:Lls with the balance of the population mainly served from the former municipal system now abandoned due to deterioration of facilities and to degradation of ground water quality by seawater intrusion. All MWA individual sources of supply and service connections are metered. Records of consumption and production are believed to be reasonably complete although, in view of the high mineral content of the water and the apparent low level of meter maintenance, meter accuracy needs to be confirmed. Existing Facilities and Service 3.02 MIA's existing water system consists of several sources of supply, of which the Balad Road well field is the principal element, plus various facilities for treatment and storage prior to delivery of the water to consuaLers. The Balad Road well field, which was financed largely by USAID, is located north of Mogadishu about 10 km inland from the coast. A system of collector mains and a 9 km long tranmission main deliver the water to Mogadishu. Two storage reservoirs, a booster station and a distribution system consisting of in excess of 100 km of mains varying from 50 mm (2") to 500 mm (20") in diameter currently provide service from two separate pressure zones to customers through about 8000 individual connections and 300 kiosks. The Balad Road supply is supplemented with production from several small- capacity tube wells located in Mogadishu. Due to marginal water quality, however, the latter wells are not connected to the distribution system but serve as individual water points for residential users and for livestock. 3.03 As originally planned, the 1173 improvements were sized to meet maximumu-day system demands of 31,500 m /day forecast for 1980. Due to a subsequent restriction in the number of wells and the inability to obtain planned-for unit weLl yiehds, however, the field was only able to produce a maximumu of about 24,000 m /day at the time of commissioning. The subsequent failure of two of the original 19 wells and declining production at the rSmain:ing wells have reduced total installed capacity to a current 19,000 m /day. Due to lowering ground water levels, coupled with the suspected clog- ging oi well strainers due to incrustation, a continuation of the past trend of declining production capacity 1/ is expected at the field. However, it is expected that some of this lost capacity can be recovered through rehabilita- tion of individual wells. 1/ This decline in production capacity has averaged 3% annually.  - 13 - Historical Water Demands 3.04 1974 was the first full year for which records of demand were avail- able and, therefore, it is difficult to establish a long-term trend based upon historical experience. As indicated in Table 3-1, increases in annual metered consumption averaged in excess of 20% during the period 1974-76. This rate of growth is not likely to be sustained over a long term since it has depended upon several unique situations occurring simultaneously, viz., (a) the start- up of a new system, (b) a population in-migration due to a prolonged drought in inland areas, (c) a backlog of potential customers requesting water ser- vice, and (d) capacity to install new connections. Table 3-1: PAST GROWTH IN ANNUAL CONSUMPTION (m x 1000) Calendar Annual Annual Increase Year Consumption Amount % 1974 3527 - - 1975 4343 816 23 1976 5257 914 21 Composition of Demand 3.05 Approximately half of the water consumed in Mogadishu is for govern- mental and institutional use. Residential usage represents slightly less than 50% of total consumption. In 1976 private connections provided ser- vice to only about 9% of a household population of 400,000 and accounted for about 22% of the total consumption. As noted in Table 3-2, little change in composition of demand has occurred during the period 1974-76. Table 3-2: COMPOSITION OF DEMAND /1 (m x 1000) 1974 1975 1976 Consumer Category Amount % Amount % Amount % Residential Private connections 731 21 955 22 1159 22 Kiosks 923 26 1087 25 1197 23 Government/Institutions 1791 51 2179 50 2762 52 Industry 82 2 122 3 139 3 Total 3527 100 4343 100 5257 100 Note: /1 In terms of consumption.  - 14 - Factors Affecting Future Demand 3.06 Demand forecasts recognize three basic categories of future consump- tion: residential, institutional and industrial. Projected residential consumption is tied to population growth but also is dependent upon household size and per capita consumption, the latter of which is further related to housing type of which four basic types are recognized (see Table 6-2). Insti- tutional consumption, which includes Governmental, is expected to increase generally in accordance with population. Industrial consumption, which is currently small and expected to remain so for the foreseeable future, is expected to grow in general conformance with Somalia's GDP. 3.07 Based upon recent trends and the current backlog of applications for service, the growth of demand is not constrained by the cost of providing ser- vice 1/ but is expected to be dependent upon the ability of MWA service crews to meet future requests for new service connections. In recognition of the probability that the yield from MWA's existing Balad Road well field cannot be significantly increased, in May 1977 MWA decreed that a water supply emergency existed and that new service connections would be limited until the emergency order is rescindedl. However, the installation of kiosks would not be simi- larly, limited. In practice the decree was applied effectively only during May-September 1977 and relaxed as soon as water shortages at source became less apparent. However, Government and MWA have given assurances that, after satisfying a backlog of applications for service existing at April 15, 1978 up to a maximum of 400, new private water connections would be limited to no more than 70 each year until future expansion of MWA supply capacity would make such limitation unnecessary. Moreover, these additions would be permitted only if, and to the extent that, they would have no reasonable effect upon Mogadishu's water supply situation. Mogadishu's water supply constraints are not likely to be eliminated until the commissioning of the Phase II Mogadishu water supply project tentatively expected by 1982. Population Forecast 3.08 Past population estimates of Mogadishu have not been reliable and, due to the influx of nomads from inland areas because of the recent drought, the total 1976 population of 445,000 estimated by the consultants is subject to some uncertainty. Despite this, in view of the short-term nature of the Project and the limited increase in supply capacity provided, the mission has accepted the consultants' projection and a reasonable trend of popula- tion growth was established based upon the experience of other nearby African countries. Future population has been estimated based upon a natural rate of increase of 3% compounded annually and an annual net in-migration of 20,000. 1/ The cost of installing a new private service connection approximates So.Sh. 300 (excluding the cost of customer meter) and is borne by the customer at the time that the application for service is submitted. Current sales price at kiosks 3and for customers with individual house connections is So.Sh. 3 per m . Customary sales price for delivery of fresh water by vendors p5ior to completion of the existing system in 1973 was So.Sh. 14 per m  - 15 - 3.09 As the consultant's demand forecast (see para 3.06 for basis of forecast) appears high, a revised demand forecast (Annex 3.1) was prepared on the basis that growth in demand for the period 1976-82 is likely to be constrained by supply capacity. Unaccounted-for-water, the difference be- tween consumption and production, has been assumed to remain at about 20% of production. In the absence of a longer period of record, and in the expectation that meter maintenance procedures will improve, this seems reasonable. Variation in Demand 3.10 Evaluation of likely variations in demand is important in planning and sizing elements of the expanded Mogadishu water system. Annex 3.2 shows future demands based upon different peaking factors for selected time periods. Only the factor shown for a maximum-demand month was based upon Mogadishu experience. Factors used for other time periods were based upon the consul- tants' experience with other water systems located elsewhere in the region. This approach is reasonable. Water systems normally are designed so that peak demand is not imposed directly upon the sources of supply. In the case of Mogadishu, operational storage capacity in each of the two service zones is able to absorb existing momentary differences in supply and3demand. System reservoirs, with a combined capacity of approximately 22,000 m (5.8 million U.S. gallons), currently provide the equivalent of slightly over one day's storage at the average day demand rate projected for 1979. This storage capacity is considered sufficient for the present and no additions to capac- ity are proposed as part of the Project. Interim Improvements by MWA 3.11 Due to the combination of increasing water demands and declining production capacity, some suppressed demand has become evident and the situation is likely to worsen before becoming better. During much of 1977, all available well units were kept operating continuously 24 hours a day. Due to the lack of standby or reserve capacity, required maintenance could not be accomplished and it now appears that major maintenance of mechanical equipment will have to be deferred until significant additions to capacity can be made. 3.12 Recognizing the seriousness of the situation, and with the expec- tation that the proposed Project will not be effective until late 1979, MWA has taken steps which, if successful, will result in additions to supply capacity in late 1977 and in 1978. These additions include the construction of six new wells and the reactivation of existing dug wells in and adjacent to the City and an interim extension of the Balad Road well field. Due to marginal water quality likely to be available from the City wells, their future usefulness can be questioned. There also is uncertainty over the probable effectiveness of MWA's Interim Improvement Program due to the little emphasis on engineering and the utilization of WDA for well construction without proper direction and supervision.  - 16 - Production Capacity Provided by Project 3.13 AdditiorLs to production capacity included in the proposed Project (Phase I) will constitute only a modest extension of Mogadishu's existing Balad Road well field. These additions will bring the combined production capacity of these wells close to current estimates of the well field's safe yield and to the economic capacity of the transmission main. Although over- production from the field is possible through the introduction of additional wells, such additi'onal production is likely to be only temporary in nature and at the expense of future production. Overproduction also could have long--lasting, detrimental effects upon the area's ground water levels and quali'ty. Thus, effective additions to supply capacity cannot be made until better information is available concerning the area' s ground water resources and a much larger project including such additions can be identified, prepared and implemented. The Project (Phase I) would provide improved information through inclusion of water resource investigations. The subsequent Phase II project would then utilize this information in providing the required addi- tions to supply capacity. 3.14 Annexes 3.2 and 3.3 show existing and proposed MWA production capacity. Annex 3.3 particularly indicates the critical shortage of supply capacity with the possibility of suppressed demand occurring from 1975 until the completion of Phase II facilities scheduled for 1982. Supply additions to be included as part of MWA's Interim Improvement Program and the proposed Project (Phase I) will not materially change the relationship between supply and clemand but will merely prevent it from getting worse. An historical loss of production capacity averaging about 3% per year annually has been assumed to continue to affect MWA's future well production.  SOMALIA MOGADISHU WATER SUPPLY PROJECT MWA D)AuiiD FORECAST (m3xl000) Annual Consumption Unaccounted Calendar Residential i Annual Private Governmental/ for water Production Increase connections Kiosks Subtotal Institutional Industrial Total % Annual Daily % 1976 1159 1197 2356 2762 139 5257 16.7 6315 17.3 - 77 1173 1147 2320 2588 138 5046 20 6307 17.3 (0.1) 78 1259 1297 2556 3134 187 5877 20 7346 20.1 16.5 79 1328 1445 2773 3334 222 6329 20 7911 21.7 7.7 1980 1483 1616 3099 3535 264 6398 20 8623 23.6 7.2 81 1483 1653 3136 3736 314 7186 20 8982 24.6 4.2 82 1648 1823 3471 3940 370 7781 20 9726 26.6 8.3 83 1795 1960 3755 4151 438 8344 20 10430 28.6 7.2 84 2349 2064 4413 4367 516 9296 20 11620 31.7 11.4 1985 3196 2144 5340 4583 607 10530 20 13162 36.1 13.3 Note:V In terms of water production, April 26, 1978  - 18 - ANNEX 3.2 MOGADISiIt WATER SUPPLY PROJECT DEMAND vs. PRODUCTION CAPACITY (m3/day x 1000) Actual or 1/ Proposed Average Daily Demand-During: Production Maximum Maximum Maximum Capacity Calendar Demand Demand Demand 2/ year Year Month Week Day Total Firm 1:1 (1.15:1) (1.25:1) (1.4:1) 19?76 17.:3 19.9 21.6 24.2 19.7 17.7 1977 17.:3 19.9 21.6 24.2 20.2 18.2 78 20.:L 23.1 25.2 28.2 28.4 25.6 79 21.7r 24.9 27.1 30.3 35.3 31.8 1980 23.6 27.1 29.4 33.0 34.2 30.8 81 24.6 28.3 30.8 34.5 33.1 29.8 82 26.6 30.6 33.3 37.3 63.5 57.1 83 28.6 32.9 35.7 40.0 61.6 55.5 84 31.7 36.5 39.7 44.4 59.8 53.8 1985 36.1. 41.5 45.1 50.5 58.1 52.3 Nctes: 1/ In terms of production. 2/ Arbitrary determination based upon assumption that 10% of installed capacity is temporarily inactive due to planned, maintenance. - April 26, 1978  - 19 - ,~~~~~~~~~~~~~~~3 3 SOMALIA MOGADISHU WATER SUPPLY PROJECT MWA WATER DEMANDS AND PRODUCTION CAPACITY Phase II project 60- 50 - 0 E 4 Maximum-daY demand / 40 .v i ~~~~~~~~Phase I projectlC X 0> < / E a 20 _daged a demand MWA I nterimn Improvements Progrwn InstlledcapaitY 10 o I~~ ~~~~~~hs I project 1 1 1 1 0. 11971 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 Calendar Year World Bank -18341  - 20 - IV. THE PROJECT Scope of Project 4.01 The3proposed Project (Phase I) will increase supply capacity by about 8,000 m /day, which is roughly equivalent to 18 months' growth in maximum day demand. The incremental addition is sized so as to increase the effective capacity of the Balad Road well field up to the 31,500 m /day installed capacity of the transmission facilities provided by the previous 1973 project. A larger water supply component has been deferred until later when better information is available concerning the extent of local water re- sourcess (see para. 1.19). Water resource investigations (a portion of which are being financed from the Bank Group's PPF) required to assist in the prep- aration of the Phase II project constitute an important element of the Project. The balance of Project components were selected to strengthen MWA instiltutionally and, in general, to provide for improved future service in the sector. Project Description 4.02 Major Project components consist of the following: (a) Water resource investigations including the drilling of test holes and bore holes, the retention of consultants, and the iEurnishing of associated advisory, monitoring and reporting services. (b) Construction work including: (i) the extension of Balad Road well field through the drilling, development and equipping of ibout 8 additional wells to produce approxi- mately 8000 m /day (1,467 US gpm); (ii) the extension and modification of Balad Road well field collector mains, and transmission main; (iii) the extension and modifica- tion of power plant and electrical supply grid at Balad Road well field; (iv) the provision for standby pump set at existing city booster station; (v) the extension of water distribution grid and construction of about 40 additional public hydrants and; (vi) the construction of workshop and field staff quarters. (c) Procurement of the following equipment: (i) vehicles and maintenance equipment; (ii) tools and workshop equipment; (iii) communications equipment; and (iv) laboratory and water treatment equipment. (d) Support of advisors to be appointed by MWA as counter- parts to the directors of Finance and Administration, and Technical Operations (see para. 4.12). (e) Support of proposed Project Management and Planning Unit (see para. 4.13).  - 21 - (f) Training component including: (i) identification of detailed training needs of MWA and WDA; (ii) implemen- tation of training program for MWA. (g) Consulting services for: (i) engineering design and supervision of construction for the Project; (ii) en- gineering design of the following Phase II project; (iii) accountancy and financial management; and (iv) tariff studies. Cost Estimates 4.03 The estimated total cost of the Project is So.Sh. 48.6 million (US$7.7 million equivalent) and excludes taxes and duties. Foreign exchange costs would amount to US$5.8 million or 75% of the total expenditures. A detailed breakdown of the cost estimates is shown in Annex 4.1 and can be summarized as follows: So.Sh. (thousands) US$ (thousands) % of Local Foreign Total Local Foreign Total Total Civil Works 5,895 9,853 15,748 936 1,565 2,501 32.5 Equipment 801 7,305 8,106 127 1,161 1,288 16.7 Counterpart Advisors 233 1,873 2,106 37 298 335 4.3 PMPU 335 136 471 53 22 75 1.0 Training Component 1,503 2,494 3,997 239 396 635 8.2 Consulting Services 1,089 8,478 9,567 173 1,347 1,520 19.7 Subtotal 9,856 30,139 39,995 1,565 4,789 6,354 82.4 Contingencies Physical 1,470 3,848 5,318 234 611 845 10.9 Price 829 2.450 3,279 131 389 520 6.7 TOTAL PROJECT COSTS 12,155 36,437 48,592 1,930 5,789 7,719 100.0 4.04 Cost estimates are based upon preliminary Project design and are expressed in terms of mid-1978 price levels. An allowance ranging from 10% to 20% was added to baseline costs for physical contingencies. The 20% allowance was applied to water resource investigations, borehole construction, and rehabilitation of existing wells due to uncertainty relative to the extent and nature of this work. Due to expected variations in the depths and locations of proposed wells, an allowance of 15% was used for the costs of well casing, collector mains, and pumping equipment, while a 10% allowance was used on remaining components. Annual price contingency factors shown below were applied to baseline costs and to physical contingencies. Government has indicated that it would waive duties and taxes on all imported goods and services required for the Project.  - 22 - Civil Works P'eriod Local Foreign Equipment 1978 11% 8% 7% 1979 10% 7.5% 6.5% 1980-81 8% 7% 6% Financing of Project 4.05 The proposed IDA Credit of U$6 million equivalent would be used to finance all foreign costs and approximately US$200,000 equivalent of local costs of selected components and would cover about 78% of the total Project costs. These would include costs associated with the water resource investi- gations and that portion of said costs paid by advances from the PPF (see para. 4.01). The advances would be reimbursed from the Credit when it becomes effective. The allocation of the proposed Project costs between MWA and WDA and the related financing sources are given below: Sources of Finance Project Internal Cash Allocated to Costs IDA Credit Generation Government US$000's US$000's US$000's US$000's MWA 7,658 5,954 854 850 WDA 61 46 - 15 Total Costs 7,719 6,000 854 865 Project Implementation 4.06 A Project Management and Planning Unit (PMPU) to be formed within MWA will be responsible for Project management (see para. 2.09) but MWA would utilize engineering consultants for detailed design, preparation of tender documents, evaluation of tenders and construction supervision. 1/ MWA has retained Sir Alexander Gibb and Partners (Africa), a Nairobi-based firm in- volved in Project pre-investment studies, for this purpose and this arrange- ment is acceptable. The Institute of Hydrology (UK) is associated with Gibb in carrying out the water resource investigations and subsequent source development work. It has been agreed that MWA would continue to retain engineering consultants whose qualifications, experience, and terms and conditions of emplcoyment would be satisfactory to IDA. The Consultant began work associated with the water resource investigations in November 1977 and the investigations are scheduled to be complete by early 1979. All Project 1/ Total engineering effort is estimated at 370 man-months of which 220 man- months would be required for detailed design and preparation of tender documents for the following (Phase II) project. Average total cost per man-month projected for engineering approximates US$3,750.  - 23 - physical works would be completed by March 1980 while all remaining Project elements would be completed by late 1981. A bar chart showing physical elements and timing of the work program is included as Annex 4.2. Advance Contracting and Retroactive Finance 4.07 Due to an urgent need to supplement existing water supply capacity (see paras. 3.13 and 3.14), MWA intends to proceed as rapidly as possible with the water resource investigations and with the implementation of Project components which will result in increased production capacity. There also is a critical need to begin efforts to strengthen MWA. The water resource investigations are being partly financed through US$500,000 PPF finance and up to this amount is expected to be reimbursed through the IDA Credit when it becomes effective. In addition to the above, retroactive finance of up to US$400,000 equivalent is proposed for consulting services, procurement of equipment and materials and, in general, to expedite Project implementation. Procurement 4.08 Approximately 60% of the total Project costs would involve construc- tion and supply contracts. Mechanical and electrical equipment and pipe are not manufactured locally and would be procured from abroad. Except as noted below, all construction and supply contracts financed by the proposed IDA Credit would be awarded on the basis of international competitive bidding (ICB) in accordance with Bank Group guidelines. The exceptions consist of drilling of boreholes and the furnishing of selected equipment, materials and supplies urgently required for the water resource investigations. MWA has re- tained WDA, through a negotiated contract, for all drilling services required in the investigations 1/ but would follow ICB procedures in contracting for the rehabilitation of existing wells and for all other Project drilling. 2/ In view of the urgency, the Association has agreed to WDA participation in the investigations and has approved of the terms and conditions of their employment. WDA would be permitted to bid on the balance of drilling work not included in the investigations. In the absence of an expression of interest by other qualified bidders (interest is unlikely in view of the small amount of drilling work remaining), MWA would have no alternative but to negotiate with WDA in contracting for this work. 4.09 Should domestic contractors (including WDA) bid for all or a por- tion of civil works in ICB, a preference of 7-1/2% would be applied to these bids. 1/ Drilling costs for the water resource investigations are estimated at US$700,000 of which about US$200,000 would be financed from the PPF. 2/ The cost of this remaining work, including the rehabilitation of exist- ing wells, is estimated at about US$600,000.  - 24 - Disbursement 4.10 The IDA Credit would be disbursed to meet selected portions of the Project cost as follows: (i) 100% of total expenditure on civil works (in- cluding the cost of drilling boreholes not included in the water resource investigations); (ii) 100% of the foreign exchange costs of equipment and supplies; (iii) 100% of the foreign exchange cost of advisors, consultants and/or specialists; (iv) 100% of the foreign exchange cost of the training component; and (v) 100% of the refunding of the project preparation advance. An estimated disbursement schedule is given in Table 4-1. Any Credit funds undisbursed at the end of the Project would be cancelled. Table 4-1: ESTIMATED SCHEDULE OF DISBURSEMENTS FROM IDA CREDIT Cumulative Disbursements IDA FY at End of Quarter Percentage and Quarter US$ Thousands of Total 1979 1st quarter 0 0.0 2nd quarter 1050 17.5 3rd quarter 1500 25.0 4th quarter 1950 32.5 1980 1st quarter 2550 42.5 2nd quarter 3190 52.5 3rd quarter 3900 65.0 4th quarter 4500 75.0 1981 1st quarter 4800 80.0 2nd quarter 5100 85.0 3rd quarter 5250 87.5 4th quarter 5550 92.5 1982 1st quarter 5700 95.0 2nd quarter 5850 97.5 3rd quarter 6000 100.0 Closing Date 4.11 The proposed closing date for the IDA Credit would be June 30, 1982. This allows a margin of six to eight months after the estimated completion of work by the counterpart advisors, training consultants, and engineering consultants.  - 25- Counterpart Advisors 4.12 Existing MWA staff do not have the requisite training or expe- rience to provide the General Manager, who is a recent appointee without prior experience in the water supply sector, with adequate technical support. To address this problem, the Project would provide funds for- che temporary appointment of two senior advisors as counterparts to the Directors of the departments of Finance and Administration, and Technical Operations (see para. 2.08). It is estimated that counterpart advisors would be required for 72 man-months at a cost of US$4,500 per man-month. Project Management and Planning Unit 4.13 The Project includes the cost of a Project Management and Planning Unit to be created to assist in Project implementation (see para. 2.09). Training 4.14 A comprehensive training component would be included in the Project to identify specific training needs of the water supply sector and to further strengthen MWA. Although the details of the proposed program still are not known, 11 the immediate thrust of training efforts would be to strengthen MWA maintenance and operation functions, to strengthen MWA accounting procedures, and, possibly, to assist in the upgrading of WDA well drilling crews (see paras. 2.22 to 2.26). The latter would supplement ongoing and proposed training efforts provided through German assistance (see para. 1.16). It is estimated that 54 man-months of consultancy services would be required at a cost of US$5,000 per man-month. Management Specialists 4.15 Management specialists also would be provided to establish appro- priate accounting procedures for MWA. The specialists would be required to assist in the implementation of such procedures and to develop a job- related training program (see paras. 2.22 and 4.14). This assignment is estimated to require about 12 man-months at about US$5,000 per man-month. Tariff Studies 4.16 Consultants also would be retained to review MWA's tariff level and structure and to make such recommendations as are considered necessary (see para. 5.05). Environmental Impact 4.17 The Project would have a negligible environmental impact although some improvements to public health are anticipated (see para. 6.11). Con- struction efforts should cause only minor inconvenience to the resident population. 1/ Consultants would be retained in the Project cycle to evaluate specific needs and to design a program to meet these needs.  - 26 - Monitoring Criteria 4.18 The progress of the water resource investigations and construction, the Project costs, disbursements, MWA's internal cash generati.on, and im- plementation of the training program are important elements to be monitored through periodic progress reports during implementation of the Project. However, other less critical indicators also would be monitored during and following Project implementation in order to measure the achievement of technical, financial, administrative and training goals set for the proposed Project. These indicators are illustrated in Annex 4.3. Due to incomplete MWA records, ce:rtain of the indicators have not been quantified. An effort would be made, through communications with MWA, to confirm the reasonableness of those indicators that have been quantified and fill in those indicators that are not yet known. Promptly after Project completion, MWA will submit to the Association a report on the execution and operation of the Project and related matters.  SOMALIA MOGADISHU WATER SUPPLY PROJECT Project Cost Estimates Local Costs Foreign Costs Total Year Ending December 31 1978 1979 1980 1981 Subtotal 1978 1979 1980 1981 Subtotal Costs --------------------------------------Sosh.OOos- Civil Works Water Resource Investigations 2518 131 2649 3102 165 3267 5916 Power Supply 119 472 591 155 649 804 1395 Source of Supply New works 448 1103 298 1849 1235 1953 167 3355 5204 Rehabilitation of existing works 90 34 124 653 -250 903 1027 Distribution System 461 65 526 250 981 64 1295 1821 General Plant 16 140 156 44 175 10 229 385 Equipment Power Supply 270 49 319 1104 1636 143 2883 3202 Pumping Plant Source of supply 375 20 395 532 1997 134 2663 3058 Booster station 27 5 32 147 131 15 293 325 Miscellaneous Equipment 55 55 734 668 64 1466 1521 Counterpart Advisors 43 76 76 38 233 339 608 608 318 1873 2106 Project Management and Planning Unit 50 95 95 95 335 22 38 38 38 136 4v1 Training Component 62 826 410 205 1503 218 1217 635 424 2494 3997 Consulting Services Water Resource Investigations 245 11 256 978 132 1llo 1366 Accounting 41 13 14 68 193 64 65 322 390 Tariff Studies 76 76 337 337 413 Engineering Design Project 11 11 446 403 45 894 905 Phase II project 1086 2172 1086 4344 4344 Supervision of construction 174 504 678 217 1254 1471 2149 Subtotals 3,711 4,601 1,206 338 9,856 9,716 14,147 4,410 1,866 30,139 39,995 Contingencies Physical 692 593 15o 35 1.470 1,469 1,711 482 186 3,848 5,318 468 227 76 829 101 1,068 863 418 2,450 3,279 TOTAL PROJECT COSTS 4L461 5X662 1X583 449 12 153 52 l6L926 5755 2a47ZO - 43637 48,592 April 20, 1978  SOMALIA MOGADISHU WATER SUPPLY PROJECT PROJECT IMPLEMENTATION SCHEDULE 0 _ .> 1977 M 1978 J 1979 1 1980 J A S 0 N D J F M A M, J J A Sl